When is the Right Time to Switch from Rudimentary Accounting Software to Full Fledged Cloud ERP?

Posted by Natalie Forsyth, Senior Director, Marketing - APAC

Choosing when to invest in an ERP suite can be a challenge for many organisations with factors including previous investments, growth, new markets or new business models. For Mons Royale, a New Zealand-based apparel manufacturer and wholesaler of high performance merino clothing, international growth turned out to be a compelling reason to move on from an entry-level accounting system.

Founded in New Zealand in 2009 by a professional skier and his wife looking for a more stylish alternative to the traditional technical merino base layers, Mons Royale began shipping international orders during its first year of business. As that international business grew, Mons Royale’s accounting software managing finance and inventory processes couldn’t support multiple currencies, or provide visibility into multi-location inventory levels in real-time. To get an end-to-end view of business, it had to manually sync data from the accounting system with disparate order management and CRM software, a time-consuming, unreliable process, and the resultant output of which couldn’t always be trusted. And as the company looked to remedy the problem, it discovered that hiring someone to strictly maintain the system would incur significant costs.

Mons Royale found itself at the same crossroads that so many small businesses face as they grow --- whether to continue to pour resources into its legacy systems or make an investment in a unified, ERP platform.

It was a good time to be faced with this choice. With the cloud democratizing access to what once was only privy to businesses with hundreds or thousands of employees, cloud ERP software was a good fit for smaller companies like Mons Royale, which had seven employees at the time.

After evaluating SAP and Salesforce.com, the company selected NetSuite OneWorld, thanks to its international capabilities, scalability and flexibility. The result has been seamless global inventory management across subsidiaries in Austria, Switzerland, United States, Australia and New Zealand and significant savings over the initial twelve-month period. The company gained a single source of the truth and visibility across its operations, insight that allowed it to triple its staff and launch a EU, CH and US trading entities.

Of course, international expansion is just one reason to make the switch from entry-level accounting to a full ERP suite. Here are some of the other indications that the time is now.

Making the Switch: Tipping Points 

Inconsistent customer data. A CRM software system often syncs with the accounting system, but it does not happen the other way around resulting in duplicate customer records.

No access to real-time business data. Due to inherent limitations of APIs, accounting software vendors limit the frequency with which third-party applications exchange information with the accounting software database. That means third-party applications sync sporadically – no more than once a day, something that’s simply not viable in today’s operating environment.

Lack of reporting to make insight-driven business decisions. Without a single source of data on inventory, orders and customers, information from each database must be synched to provide reports on sales, costs of goods sold, inventory levels and every other key business metric.

Insufficient global functionality for multi-subsidiary, multi-currency support. Accounting software is designed to handle the assets, liabilities and liquidity of a single entity. Introduce a different structure, or different currencies, and you have a problem. While functionality exists to manage multiple entities, consolidating the financial activity requires manual processes that introduce errors and inefficiencies. Calculating tax in different currencies also requires time-consuming manual processes.

Limited access control. Employees accessing multiple applications with multiple log-ins introduces security risk, especially when employees leave and it becomes difficult to ensure that access to all systems has been revoked. And without the ability to implement controls on data access in different systems, implementing workflows that ensure efficiencies, security and regulatory compliance isn’t possible.

Look to the cloud ERP

Smaller businesses often don’t even enter the discussion on ERP implementation because they think they can’t afford the investment, when a unified platform actually provides long-term savings. Cloud ERP software opens the door for small businesses to realise these advantages by freeing them from costly infrastructure investments and maintenance.

A unified, cloud-based platform allows users to access consistent, reliable data in real-time. It ensures a business has access to all the functionality it needs to operate in the global economy, while ensuring it is protected from risks. It provides end-to-end visibility across operations, and lends easy access to data for executives to make insight-driven business decisions.

For more on the differences between entry-level accounting and a full ERP suite and what that can do for the business, download the white paper What are the main differences between SMB accounting software and an ERP system?

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